Outstanding balance cover: the insurance banks sell badly
It is the line everyone pays for and nobody explains. Mortgage life insurance is not compulsory by law, and above all the bank cannot impose its own insurer on you — even when it ties your rate to taking the policy with it. Since 2024 it can no longer withdraw that rate reduction if you switch insurer along the way. Here is what you can use.
When you put a loan file together, the outstanding balance insurance turns up at the end, like a formality. Yet it is a contract that can cost several thousand euros over the life of the loan, and one on which the law gives you rights the banks have no interest in advertising.
Compulsory? No. Required? Often.
Two things need separating here, and the sales pitch happily blurs them.
The official wording from Wikifin, the financial education service of the FSMA, leaves no room for doubt: the lender "cannot oblige you to take out this insurance with an insurer it has designated. In other words: you get to choose the insurer".
The one-third rule: the 2024 lever
This was the classic lock. The bank granted a rate reduction tied to taking the insurance out with it, and threatened to withdraw that reduction if you switched insurer — which made free choice theoretical.
Since 1 June 2024, once the loan has been running for at least one third of its total term, the lender can no longer withdraw the rate reduction granted at the outset if you transfer your insurance to another insurer offering an equivalent service. On a twenty-four-year loan, the lock therefore lifts after eight years.
Wikifin does not explicitly say whether the rule covers loans signed from 1 June 2024 onwards or every loan running on that date. Unofficial sources go with the first reading. Get it confirmed in writing before starting a transfer.
The right to be forgotten, cut to five years
Once a certain period has passed since the end of successful treatment, the insurer can no longer take a former cancer into account — even if it knows about it. No refusal, no exclusion, no additional premium on that ground.
| Contract signed | Period that applies |
|---|---|
| From 1 February 2020 to 26 November 2022 | 10 years |
| From 27 November 2022 to 31 December 2024 | 8 years, or 5 years if under 21 at diagnosis |
| Since 1 January 2025 | 5 years, all cancers, at any age |
Active treatment — surgery, radiotherapy, chemotherapy — must be over. Hormone therapy is the exception: it does not stop the clock running, which changes a great deal for breast cancers.
An official reference table shortens these periods further for certain cancers, where no other risk factor is present: one year for a breast cancer at a very early stage, a melanoma in situ or a treated CIN III of the cervix; three years for a stage I seminoma or a stage I thyroid cancer; five years for a renal carcinoma or a Hodgkin lymphoma.
A second table covers chronic illnesses by capping the loading: no loading for hepatitis C with F2 fibrosis, 100% for HIV with CD4 above 350/mm³, 125% for F3 fibrosis, 150% for chronic myeloid leukaemia.
Refused, or loaded: two remedies
A loading of 200% is offered. The insured pays 125%, and the compensation fund covers the remaining 75%. The mechanism is automatic as soon as the threshold is crossed.
The Bureau also approves insurers' medical questionnaires, which limits the questions you can legally be asked.
The tax benefit: what is left of it
⚠️ The regional benefits have all disappeared for new loans. In Flanders for loans signed since 1 January 2020. In Brussels since 1 January 2017. In Wallonia, the Chèque Habitat is gone for loans signed since 1 January 2025. FPS Finance is explicit: for mortgage loans signed since 1 January 2025 there is no tax benefit left, except when refinancing an older loan that qualified. Earlier loans keep their regime.
What remains is federal long-term savings: a ceiling of €2,450 in 2026, a tax reduction of 30%, so a maximum benefit of €735, for a contract running at least ten years.
The trap is elsewhere. This "basket" groups together mortgage life insurance premiums, the capital repayments on the mortgage loan and individual life insurance premiums. So it is often already full from the repayments alone. The individual ceiling also depends on your professional income through a formula the FPS does not publish as a fixed amount: your MyMinfin simulator gives the figure that applies.
Borrowing as a couple: the question of the insured share
The insured share determines the portion of the outstanding balance cleared on the death of each borrower. You choose it freely, and no official source recommends a standard split — so we are not going to invent one.
The principle guiding that choice is simple: the more income one of you brings to the repayment capacity, the more that person's death would leave the survivor exposed, and the higher the share on that head should be. Two shares of 100% cover the balance in full whichever borrower dies, at a logically higher cost.
One point the bank rarely mentions: when two people borrow together, the lender can pursue either co-borrower indifferently, including for the whole balance. The insured share protects the survivor against exactly that risk.
Verdict
Mortgage life insurance is useful: without it, the death of one borrower leaves the survivor with the entire debt. The problem is not the product, it is the way it is sold.
Three habits are enough to take back control. Ask for a quote elsewhere, every time, even when the bank waves a rate reduction at you — free choice is a right. Bring a case to the Tariff Monitoring Bureau if a loading exceeds 75%: it is free and the decision binds the insurer. And check the right to be forgotten before declaring a former cancer: after five years, the insurer no longer has the right to take it into account.